for business managnent

Question 2: Compounding Annually vs. Compounding Monthly (8 pts total) Compounded Annually Scenario: You have $1,000 loan with an annual interest rate of 12% that is compounded annually for 3 years. You will pay the loan in one lump sum at the end of 3 years. How much will the loan cost you? 2. Determine the FV of the loan if it is compounded annually. 3 pts Hint: How much will the loan (a single, one time payment) be worth at the end of 3 years? Compounded Monthly Scenario: You have $1,000 loan with an annual interest rate of 12% that is compounded monthly_for 3 years. You will pay the loan in one lump sum at the end of 3 years. How much will the loan cost you? b. Determine the FV of the loan if it is compounded monthly. 3 points Hint: How much will the loan (a single, one time payment) be worth at the end of 3 years? c. Which is the more expensive loan? Why? 2 pts